Investors should prepare for slower economic growth and a weaker stock market due to President Trump’s new tariffs, which are expected to be announced today at 4:00 PM EST. That’s what Peter Berezin, the chief strategist at BCA Research, told Yahoo Finance in an interview. Berezin is known for his accurate 2022 prediction that the U.S. would avoid recession while most analysts expected one. Now, he warns that there’s a 75% chance of a U.S. recession in 2025 and even believes the country may already be in a mild downturn. If his forecast is correct, then he predicts that the S&P 500 (SPX) could fall another 21% to 4,450.
Berezin expects the U.S. economy to shrink slightly this year due to rising inflation from the growing global trade war. He says gold (GLD), consumer staples (XLP), and, eventually, bonds may be the safest bets for investors. While the overall market has dropped, most of the decline has come from the “Magnificent Seven” tech stocks. The rest of the S&P 500 has been relatively flat, which suggests that markets have not fully priced in the risk of a recession caused by tariffs.
Other major analysts are also turning cautious. Indeed, Goldman Sachs’ chief economist, Jan Hatzius, now sees U.S. GDP growing by just 1.5% this year, down from 1.9%, and has raised the recession odds to 35%. Meanwhile, Goldman’s David Kostin cut his S&P 500 year-end target to 5,700 from 6,200 due to rising recession risk and uncertainty around tariffs. It is worth noting that Berezin believes the coming recession may not be as deep as the 2008 recession but could still hurt stocks significantly—much like in 2001, when a mild economic downturn led to a nearly 50% market drop.
Is SPY a Buy Right Now?
Overall, analysts still have a Moderate Buy consensus rating on the SPDR S&P 500 ETF Trust (SPY) based on 409 Buys, 87 Holds, and eight Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average SPY price target of $682.37 per share implies 21.3% upside potential.
